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5.3 ERMUSR 11-09-2005
i 110 Elk River Municipal Utilities ' 13069 Orono Parkway phone: 763.441.2020 Elk River,MN 55330 Fax:763.441 8099 October 19, 2005 To: Elk River Municipal Utilities Commission ' Jerry Takle John Dietz Jim Tralle ' From: Bryan Adams ' Subject: Electrical & Water Financial Projections Twice annually we update our electric and water financial projections to ensure we have ' the necessary financial resources in the future. These times are at years end during the budgeting process and after the audit. Attached are the electric & water projections reflecting the 2006 budget assumptions. In summary, these financial projections reflect similar results as previous years. We continue to have adequate financial reserves with the assumptions made, although our ' cash reserves are thin in the next few years. The bottom line for both the electrical and water projections are highlighted reflecting the total cash balance. The financial projection in the later years of these studies should be viewed with some caution because ' they are very dependant on assumptions of sales growth rate, connect fees, capital projects, wholesale and retail rates changes. Your staff continues to be conservative in these assumptions. 1 NM 111111ir MO IMIN M NM = MINI la Mill NM M IIIII MN 1011. Mill di NM Shee Al B I C I D I E I F I G I H I I I J j K I L I M 1 N I 0 I P 10 I R 1 2 Rev 10-18-05 3 6 1 295 1 405 1 623 1 82 6 5 1 95 2.15 2 2 2 25 2 3 2 35 2 4 2 45 4 1500 1750 2000 2250 5 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 6 Description 7 Pumping Units 706804 651253 786500 796725 824610 849348 883322 927488 964588 1003171 1043298 1085030 1128431 4%-5% 8 Sales Units 632590 642019 676390 685183 709164 747426 759657 797640 819900 852696 886803 922275 959167 85%ofCol 7 9 #Meters 3321 3696 3876 4056 4236 4416 4596 4776 4956 5136 5316 5496 5676 180/Year 10 WAC Units 444 560 260 238 238 238 230 220 220 215 215 200 200 11 Operations 12 Revenue 13 Revenue from Sales $1,047,560 $1,167,954 $1,376,853 $1,539,065 $1,699,239 $1,787,889 $1,977,711 $2,113,296 $2,217,302 $2,347,768 $2,484,596 $2,628,109 $2,778,646 Rate+3% 14 WAC Revenue $666,231 $839,911 $455,000 $476,000 $476,000 $476,000 $460,000 $495,000 $495,000 $483,750 $483,750 $450,000 $450,000 15 Other Revenue $115,629 $135,754 $72,800 $71,000 $72,065 $73,146 $74,243 $75,357 $76,487 $77,634 $78,799 $79,981 $81,181 1 5% 16 Total Revenue $1,829,420 $2,143,619 $1,904,653 $2,086,065 $2,247,304 $2,337,035 $2,511,954 $2,683,652 $2,788,789 $2,909,152 $3,047,145 $3,158,090 $3,309,827 17 18 Expense 19 Water Production $19,244 $29,341 $10,000 $10,282 $10,801 $11,555 $11,920 $12,704 $13,254 $13,991 $14,769 $15,590 $16,457 1 5% 20 Water Pumping $411,527 $282,227 $258,818 $367,950 $396,061 $434,127 $458,881 $501,098 $535,685 $579,397 $626,676 $677,812 $733,122 4% 21 Water Distnbution $123,250 $148,216 $142,400 $177,850 $183,186 $188,681 $194,341 $200,172 $206,177 $212,362 $218,733 $225,295 $232,054 3% 22 Meter Reading $15,633 $23,512 $22,643 $24,175 $17,791 $21,197 $22,061 $22,925 $23,789 $27,734 $28,706 $29,678 $30,650 Step 23 Depreciation $585,354 $720,044 $600,000 $750,000 $787,500 $826,875 $868,219 $911,630 $957,211 $1,005,072 $1,055,325 $1,108,092 $1,163,496 Step 24 Interest Expense $356,701 $256,207 $256,683 $244,908 $231,729 $217,923 $245,629 $228,269 $289,767 $268,182 $244,842 $219,703 $199,537 Study Sheet 25 Other Operating(1999 P&I) $37,710 $33,897 $29,648 $28,808 $27,958 $32,088 $30,988 $29,875 $28,750 $27,600 $31,425 P&I 1999 Bond 26 Other Operating $26,046 $0 $0 $0 $0 $0 $0 $0 SO $0 SO $0 27 Customer Expenses $17,389 $16,300 $29,413 $21,861 $22,517 $23,192 $23,888 $24,605 $25,343 $26,103 $26,886 $27,693 $28,524 3% 28 Administrative&General $262,636 $314,824 $280,134 $435,426 $465,906 $498,519 $533,416 $570,755 $610,707 $653,457 $699,199 $748,143 $800,513 7 00% 29 Total Expense $1,829,444 $1,850,614 $1,629,739 $2,061,259 $2,143,449 $2,254,158 $2,389,343 $2,502,031 $2,690,684 $2,813,898 $2,946,562 $3,052,007 $3,204,353 30 Gross Margin(Operation) -$24 $293,005 $274,914 $24,806 $103,855 $82,878 $122,611 $181,622 $98,105 $95,254 $100,583 $106,083 $105,474 31 32 Operation Funded CP $457,500 $364,667 $383,750 $345,250 $462,250 $388,500 $337,250 $312,250 $115,250 $139,250 $667,000 $125,500 $297,750 33 Net Margin -$457,524 -$71,662 -$108,836 -$320,444 -$358,395 -$305,622 -$214,639 -$130,628 -$17,145 -$43,996 -$566,417 -$19,417 -$192,276 34 35 Capital Projects w Bonds 36 37 Revenue 38 Bond Revenue $1,300,000 $0 $0 $0 $0 $0 $800,000 $0 $1,500,000 $0 $0 $0 $0 39 40 41 Expense 42 Bond Payments Pnn $280,000 $218,750 $388,750 $410,000 $425,000 $395,000 $421,250 $468,100 $489,880 $548,499 $578,486 $597,411 $302,781 Study Sheet 43 Capital Outlay Expenses $1,209,212 $471,182 $0 $120,000 $20,000 $0 $400,000 $400,000 $1,700,000 $0 $1,200,000 $0 $0 44 Total Expense $1,489,212 $689,932 $388,750 $530,000 $445,000 $395,000 $821,250 $868,100 $2,189,880 $548,499 $1,778,486 $597,411 $302,781 45 Gross Bond Margin -$189,212 -$689,932 -$388,750 -$530,000 -$445,000 -$395,000 -$21,250 -$868,100 -$689,880 -$548,499 -$1,778,486 -$597,411 -$302,781 46 47 48 Inventory &Acc Payable Adj $12,030 -$23,489 49 Deprecation $186,000 $585,354 $720,044 $600,000 $750,000 $787,500 $826,875 $868,219 $911,630 $957,211 $1,005,072 $1,055,325 $1,108,092 $1,163,496 23 50 Reserve Account $806,157 $916,157 $1,026,157 $1,136,157 $1,246,157 $1,356,157 $1,466,157 $1,576,157 $1,686,157 $1,796,157 $1,906,157 $2,016,157 $2,126,157 $120k/year 51 Bond Account $998,472 $823,433 $815,847 $605,402 $479,507 $495,760 $1,018,089 $820,991 $961,177 $1,263,754 -$135,825 $245,439 $803,878 51-49 52 Total Cash Balance $4,966,312 $1,804,629 $1,739,590 $1,842,004 $1,741,559 $1,725,664 $1,851,917 $2,484,246 $2,397,148 $2,647,334 $3,059,911 $1,770,332 $2,261,596 $2,930,035 51+32+44+47+48 SpringstadBcaWater Page 1 M N . E I - OM M - g M I I NM N i j M A I B 1 CI D I E I F I G I ridet2 I 1 JI K I L I M 1 N 1 0 I P 1 Elk River Municipal Utilities 2 Capital&Bond Revenue/Expenditures 3 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 4 Capital Outlay 5 Watermain Improvements 0 0 0 0 0 0 0 0 0 0 0 0 0 0 6 New Water Tower 159,212 0 0 0 0 0 0 1,700,000 0 0 0 0 7 New Well&Filter Plant 650,000 400,000 120,000 20,000 0 400,000 400,000 0 0 1,200,000 0 1,200,000 8 Land Acquisition 0 0 0 0 0 0 0 0 0 0 0 0 0 0 9 Engineering 0 0 0 0 0 0 0 0 0 0 0 0 0 10 Administration Bldg 400,000 0 0 0 0 11 Total Capital Outlay 1,209,212 400,000 0 120,000 20,000 0 400,000 400,000 1,700,000 0 1,200,000 0 0 1,200,000 12 13 Bond Issuance 14 Watermain Improvements 0 0 0 0 0 0 0 0 0 0 0 0 0 15 New Water Tower 0 0 0 0 0 0 0 0 0 0 0 0 16 New Well&Filter Plant 900,000 0 0 800,000 0 1,500,000 0 0 0 0 17 Land Acquisition 0 0 0 0 0 0 0 0 0 0 0 0 0 18 Engineering 0 0 0 0 0 0 0 0 0 0 0 0 19 Administration Bldg 400,000 20 Net Bond Proceeds 1,300,000 0 0 0 0 0 800,000 0 1,500,000 0 0 0 0 0 21 Discount&Costs of Issuance 52,000 0 0 0 0 0 32,000 0 60,000 0 0 0 0 0 22 Total Bond Size Admin&2003 0 0 0 0 0 832,000 0 1,560,000 0 0 0 0 0 23 24 Term(years) 20 15 15 15 15 15 15 15 15 15 15 15 15 15 25 Average Annual Rate 0 05 0 05 0 05 0 05 0 05 0 05 0 05 0 05 0 05 0 05 0 05 0 05 0 05 26 Annual Debt Service 0 0 0 0 0 0 80,157 0 150,294 0 0 0 0 0 27 28 Debt Service 29 1993 Water Revenue Bonds 107,315 0 0 30 1994 Water Revenue Bonds 106,565 0 0 31 1997 Water Revenue Bonds 42,135 40,525 43,880 41,960 0 0 0 0 0 32 1998 Water Revenue Bonds 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 33 1999 Water Revenue Bonds All Expensed I. 0 1 34 35 2001 Water Revenue Bonds 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 294,000 36 Administration Bldg 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 37 2003 Water Revenue Bonds 252,000 252,000 252,000 252,000 252,000 252,000 252,000 252,000 252,000 252,000 252,000 252,000 38 2005 Water Revenue Bonds 0 0 0 0 0 0 0 0 0 0 0 0 0 39 2006 Water Revenue Bonds 0 0 0 0 0 0 0 0 0 0 0 0 40 2009 Water Revenue Bonds 0 0 0 0 0 0 0 80,157 80,157 80,157 80,157 80,157 80,157 80,157 41 2010 Water Revenue Bonds 0 0 0 0 0 0 0 0 0 42 2011 Water Revenue Bonds 150,294 150,294 150,294 150,294 150,294 43 2013 Water Revenue Bonds 0 0 44 2014 Water Revenue Bonds 45 Total Debt Service 626,015 445,525 700,880 698,960 657,000 657,000 657,000 737,157 737,157 887,451 887,451 887,451 887,452 887,451 46 47 Maintenance&Repair(Operations) 48 Watermain Improvements 300,000 25,000 125,000 155,000 325,000 100,000 300,000 250,000 50,000 100,000 300,000 20,000 250,000 20,000 49 Paint Water Towers 130,000 30,000 250000 250,000 50 Trucks&Generators 60,000 26,800 15,000 82,000 28,000 0 0 0 28,000 0 70,000 60,000 0 60,000 51 Control Upgrades 90,000 150,000 42,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 52 Remove Water Towers 53 Eastern Area 54 SCADA&GIS 75,000 27,000 55 Miscellaneous 15,000 5,000 15,000 5,000 5,000 5,000 5,000 5,000 7,000 7,000 7,000 15,000 15,000 56 Pull Well 15,000 78,000 38,000 60,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 57 Total Maintenance&Repair 450,000 306,800 380,000 332,000 455,000 382,000 332,000 282,000 110,000 134,000 654,000 114,000 292,000 122,000 58 59 Administration 60 Capital Projects Administrate 30,000 80,000 15,000 53,000 29,000 26,000 21,000 121,000 21,000 21,000 52,000 46,000 23,000 96,4hegstadBcaWatMeter Share of Adm (25%) 7,500 20,000 3,750 13,250 7,250 P£4600 5,250 30,250 5,250 5,250 13,000 11,500 5,750 OM M I r MN all r IS l all MI IIIIII lall all all el all ELK RIVER MUNICIPAL UTILITIES ELECTRIC INCOME STATEMENT PROJECTIONS I E I F G H I I J K L M I N 0 P j 0 R 2005 ( 2006 2007 200E I 2009 2010 2011 2012 2013 2014 2015 2016 _ Rev 10-21-05 Z r, Target 10M (Target 5M Target 5M .Target 10M Target 5M Target_ 5M 'Target 5M - - O I� 7,092 191,031,000 199,818,426 219,010,0741 229,584,537 245,145,4261 2.66,422,115 283,144,688 300,603,055 318,829,589 332,858,091 347,503,847 460% E I g I X0-4_ 350 350 300 300 300 300 300 _ 300 300 I 300 300 w N<u-1_ 8,581 _ 8,931 9,231 9,531 9,831 10,131 10,431 10,731 _11,031 11,331 11,631 Z I w w i 225,000 225,000 225,000+ _ 225,000 225,000 225,000 j 225,000 225,000 I 225,000 225,000r 225,000 I- . _ 0 iili� YI?x OU 0,125,000 125,000 -_125,000 1 125,00_0 125,000 1 125,000 ; 125,000 125,000 125,000 125,000 125,000 Q 1 0 081091 0 081091! 0081091 1 0.081091 0 0810911 0 081091 0 0810911 0 081091 0 081091 0 081091 16,203,476 17,759,746 I 18,617,240 ' 19,879,088 21,604,436 J 2.2,960,486 24,376,202 25,854,210 26,991,795 28,179,434 5245,145)- (399,633)1 (424,717) (751,5081 (956,489) 11,331,432) (1,390,015)1 -$0 00100 350,000 350,000 350,000 350,000 350,000 1 350,000 350,000 350,000 350,000 350,000 '1,550 341,550 ' 341,550 341,550 341,550 341,550 _ 341,550 I 341,550 341,550 341,550 107 959,334 974,260 989,6921,005,630 1,021,569 1,038,013 1,054,740 1,071,914 1,089,370 180,121 180,121 180,121 I 180,121 180,121 180,121 180,121 180,121 180,121 19,590,751 I 20,463,171 I 21,495,305 1 23,082,104 24,429,0094_ 25,534,379 26,824,132 27,603,948 28,750,460 -T 0 050694 0 05069 0 050691 0 05069 0 05069 0.05069 0 05069 0 05069 0 05069 _ 11,745,515 1 12,312,623 13,147,154 14,288,223 15,185,0551 16,121,348 17,098,837 17,851,186 18,636,638 1 06*con*pnce _ 485,0191 491,046 500,376 506,622 _ 516,176 522,649 535,629 542,337 555,557 235,919 242,996 250,286 257,795 265,529 273,494 281,699 290,150 298,855 _ 3 0%) 171,357 175,641 180,032 I 184,533 189,146 I 193,875 198,722 203,690 I 208,782 ; 2 5% 773,623 808,436 844,816 882,833 922,560 964,075 _ 1,007,459 1,052,794 1,100,170 4 5% 1,612,568 f 1,660,945 1,710,773 1,762,097 1,814,959 _ 1,869,408 1,925,491 1,983,255 2,042,753 3 0% 212,531 1 200,723 187,950 174,260 186,911 H 169,899 152,005; 133,220 116,042 Study Sheet 908,678 1_ 935,938 1 964,016 992,937 1,022,725 1,053,407 1,085,009 ' 1,117,559 1,151,086 3 0% 167,580+ 175,959 184,757 193,995 203,695 213,879 224,5731 235,802 247,592 I 5 0% 39,271 41,235 43,296 45,461 47,734 50,121 52,627 55,258 58,021 50, _ 1,881,428 I 2,013,1281 2,154,047 2,304,830 2,466,168 2,638,800 2,823,516 j 3,021,1621 3,232,643 1 7 0%' _ 18,233,488 I 19,058,671 i 20,167,503 21,593,585 22,820,658 24,070,955 25,385,566 I 26,486,414 27,648,139_ - - - - 1 1,357,2631,404,500 1 1,327,8021 1,488,519 1,608,351 - 1,463,424 1,438,566 I 1,117,534 1,102,321 I 6 93% 6 86%1 6 18%I 6 45% 6 58% - 5 73% 5 36%1 4 05% - 3 83% - - L i 500,000) - - - - � I i 313,872 1 324,977 T 341,376 j 354,331 409,354 428,608 444,552 464,703 I 365,331 . I (189,059) (189,351)4 (191,323) (197,4381 (198,440) (201,581){ (209,353) (211,511) (219,297) - (330,000) I _ (330,000) 2,564,000_ _2,190,000 3,270,000 1,635,000 2,305,000 2,170,000 3,215,000 2,070,000 3,000,000 _ 19,500 L 15,750 90,750 15,750 I _ 15,750 _ 39,000 _ 34,500 , _- 17,250 30,000 , - - - - i 1 11,729,168){ (1,315,578) (2,065,647) (714,000) 51,320,193)' (1,375,765)7(2,464,839) (1,645,930) (2,512,307)1 - T 8 83% -6 43%I -9 61%I -3 09% _ -5 40%_ -5 39%, -9 19%� -5 96% -8 74%,1 - t --- I - - } 1,612,568 1,660,945 1,710,773 L 1,762,097 1,814,9591- 1,869,408 i 1,925,491 1 1,983,255 2,042,753 - t 1 (116,600) 345,367 (54,874)) 1,048,097 494,766 493,643 - (539,348),1- 337,326 1 5469,554)1 - 1,280,9081 1,280,908 1_280,908 1280,908 1,280,908 1280,908 1,280,9081 1,28Q 6 1,280,9081 L 1 _ _ __-_ - 3,386,1311 2,916,576[ - 1,561,154 1,906,5211 1,551,647 2,599,744 3,094,510 3,588,153 3,048,805 I 2,842,0621 3,187,4291 2,832,5551 3,880,652 4,375,418 4,869,061 4,329,713'1 4,667,0391 4,197,484' Page 1